Reference no: EM13197110

1. Fink Insurance collected premiums of $18,800,000 from its customers during the current year. The adjusted balance in the Unearned premiums account increased from $4.0 million to $9.3 million dollars during the year. What is Finks revenue from earned insurance premiums for the current year?

            A $13,500,000.  B $24,100,000.   C $9,500,000   D $18,800,000.

2. False Value Hardware began 2013 with a credit balance of $31,300 in the allowance for sales returns account. Sales and cash collections from customers during the year were $600,000 and $560,000, respectively. False Value estimates that 7% of all sales will be returned. During 2013, customers returned merchandise for credit of $22,000 to their accounts.

False Value's 2013 income statement would report net sales of:

             A $590,700  B $558,000.  C $568,700.  D$578,000.

3.Chez Fred Bakery estimates the allowance for uncollectible accounts at 3% of the ending balance of accounts receivable. During 2013, Chez Fred's credit sales and collections were $113,000 and $139,000, respectively. What was the balance of accounts receivables on January 1, 2013, if $190 in accounts receivable were written off during 2013 and if the allowance account had a balance of $660 on December 31, 2013?

            A $39,000.   B$970   C$48,190  .D None of the above is correct.

4.As of  December 31, 2013, Amy Jo's Appliances had unadjusted account balances in accounts receivable of $319,000 and $880 in the allowance for uncollectible accounts, following 2013 write-offs of $6,390 in bad debts. An analysis of Amy Jo's December 31, 2013, accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for 2013 should be:

             A$6,390.B$6,380. C $5,500  D None of the above is correct

5.On January 1, 2013, Badger Inc. adopted the dollar-value LIFO method. The inventory cost on this date was $120,000. The 2013 ending inventory, valued at year-end costs, was $171,000. The relative cost index for this inventory in 2013 was 1.25.

Suppose that Badger's 2014 ending inventory, valued at year-end costs, was $183,400 and that the relative cost index for this inventory in 2014 was 1.31. In determining the inventory balance should Badger report in its 12/31/14 balance sheet:

A  An additional layer of $46,600 is added to the 1/1/14 balance.

B  An additional layer of $45,608 is added to the 1/1/14 balance.

C  An additional layer of $4,192 is added to the 1/1/14 balance

D  None of the above is correct.

6. .Linguini Inc. adopted dollar-value LIFO (DVL) as of January 1, 2013, when it had an inventory of $783,000. Its inventory as of December 31, 2013, was $798,000 at year-end costs and the cost index was 1.05. What was DVL inventory on December 31, 2013?

rev: 05_08_2014_QC_49321

            A 760,000  B 783,000  C 798,000  D 822,150

7. Fad City sells novel clothes that are subject to a great deal of price volatility. A recent item that cost $20.50 was marked up $12.30, marked down for a sale by $5.00 and then had a markdown cancellation of $3.90. The latest selling price is:

            A $25.50.  B $31.70.  C $34.30  D $36.70.

8 .Vijay Inc. purchased a three-acre tract of land for a building site for $280,000. On the land was a building with an appraised value of $115,000. The company demolished the old building at a cost of $12,100, but was able to sell scrap from the building for $1,640. The cost of title insurance was $920 and attorney fees for reviewing the contract were $480. Property taxes paid were $2,800, of which $270 covered the period subsequent to the purchase date. The capitalized cost of the land is:

            A $296,030. B$294,390. C$166,190  D$296,300.

9..On March 31, 2013, M. Belotti purchased the right to remove gravel from an old rock quarry. The gravel is to be sold as roadbed for highway construction. The cost of the quarry rights was $223,200, with estimated salable rock of 31,000 tons. During 2013, Belotti loaded and sold 5,100 tons of rock and estimated that 25,900 tons remained at December 31, 2013. At January 1, 2014, Belotti estimated that 10,200 tons still remained. During 2014, Belotti loaded and sold 15,300 tons.

Belotti would record depletion in 2013 of (Do not round depletion rate per ton):

             A $43,951. B $36,720.  C $27,540  D $35,080.

10. .Granite Enterprises acquired a patent from Southern Research Corporation on January 1, 2013 for $4.9 million. The patent will be used for 5 years, even though its legal life is 20 years. Rocky Corporation has made a commitment to purchase the patent from Granite for $200,000 at the end of five years. Compute Granite's patent amortization for 2013, assuming the straight-line method is used.

             A $470,000.  B $490,000   C $980,000  D $940,000

11. In January of 2013, Vega Corporation purchased a patent at a cost of $215,000. Legal and filing fees of $55,000 were paid to acquire the patent. The company estimated a 10-year useful life for the patent and uses the straight-line amortization method for all intangible assets. In 2016, Vega spent $27,000 in legal fees for an unsuccessful defense of the patent. The amount charged to income (expense and loss) in 2016 related to the patent should be:

            A  $215,000.  B $ 27,000.  C $ 54,000.  D $216,000.

12. Nichols Enterprises has an investment in 33,000 shares of Elliott Electronics that Nichols accounts for as a security available for sale. Elliott shares are publicly traded on the New York Stock Exchange, and the Wall Street Journal quotes a price for those shares of $13 a share, but Nichols believes the market has not appreciated the full value of the Elliott shares and that a more accurate price is $18 a share. Nichols should carry the Elliott investment on its balance sheet at:

rev: 11_26_2013_QC_40876

            A $429,000.

            B $594,000.   

            C Either $429,000 or $594,000, as either are defensible valuations.

            D $511,500, the midpoint of Nichols's range of reasonably likely valuations of Elliott.